AT&T CEO Expects Time Warner Deal to Happen ‘This Year’

AT&T reported first-quarter earnings in line with expectations Tuesday afternoon, but all eyes were on the telecom giant’s proposed $85 billion acquisition of Time Warner. On a conference call after the earnings release, AT&T Chairman and CEO Randall Stephenson obliged, providing a status update on the mega-merger.

“On the Time Warner deal, approval is moving along as expected,” Stephenson said on the call. “The European Commission has approved it, the Department of Justice is now reviewing it.”

Because the proposed merger doesn’t involve the transfer of licenses, Stephenson said he doesn’t expect the Federal Communications Commission will find a need to review it all.

Stephenson also answered a question about AT&T’s DirecTV satellite business, which has been struggling to keep subscribers along with other traditional pay-TV services as cord-cutting gains in popularity. AT&T has its own internet-based “skinny bundle,” DirecTV Now, which cleared 200,000 subscribers earlier this year — but AT&T declined to provide a current subscriber count along with its quarterly earnings report. Stephenson said DirecTV Now has not taken subscribers away from DirecTV.

“There’s some cannibalization by DirecTV Now but it’s fairly nominal,” Stephenson said.

He said much of the pay-TV subscriber loss is concentrated in areas where AT&T only offers a standalone TV package, but other players offer bundled packages. Earlier in the call, AT&T Chief Financial Officer John Stephens said the company has pulled back on its DirecTV Now marketing to let the service settle in, but to expect a more aggressive posture in the second half of the year.

“It’s still only five months since the DirecTV Now launch, but we like what we see and feel very good about the service and where it’s headed,” Stephens said.

10 Biggest Billion-Dollar Entertainment Deals in 2016 (Photos)

Media and entertainment dealmakers returned in full force this year after a quiet 2015, as there were nine mergers and acquisitions valued at more than $1 billion -- from Chinese buyers such as the Dalian Wanda Group to AT&T, which agreed to acquire Time Warner for $85 billion. Here's a rundown of the biggest.

Various

10. Disney buys a minority stake in BAMTech

Price tag: $1 billion

In August, the Mouse House announced that it paid $1 billion for a 33 percent stake in streaming video technology company BAMTech, which was spun off from Major League Baseball’s MLB Advanced Media. Disney plans to use BAMTech’s technology to launch a standalone ESPN streaming service – but without the same content as linear ESPN.

The real estate and entertainment conglomerate owned by China’s richest man continues to snap up showbiz companies by the billion, acquiring the Golden Globes and American Music Awards producer for a cool $1 billion earlier this month.

Dick Clark Productions

8. Rovi acquires TiVo

Price tag: $1.1 billion

Video technology firm Rovi Corp., bought the pioneering live-TV recording tech company for $1.1 billion in a deal that was finalized in September. After the deal was complete, Rovi adopted the better-known TiVo name.

Getty Images

7. AMC Theatres buys Carmike Cinemas

Price tag: $1.2 billion

Wanda-owned AMC Theatres acquired Carmike, the U.S.’ fourth-largest exhibitor, forming the biggest theater chain in the country with more than 600 theaters. That surpasses Regal Entertainment, which operates 565 locations.

AMC/Carmike

6. AMC Theatres buys Odeon & UCI Cinemas

Price tag: $1.2 billion

AMC also added Odeon & UCI Cinemas, Europe's biggest chain, to its ever-expanding suite of cinemas. AMC will rename the company to Odeon Cinemas Group and maintain its London headquarters.

AMC/Odeon & UCI

5. Dalian Wanda Group buys Legendary Entertainment

Price tag: $3.5 billion

Wanda was responsible for the first megadeal of 2016, when it acquired the “Jurassic World” production company for $3.5 billion. Legendary lost $500 million in 2015, but its action-packed fare such as “Warcraft” is popular in China’s fast-growing movie market.

Legendary/Wanda

4. Comcast's NBCUniversal buys DreamWorks

Price tag: $3.8 billion

The blowout success of animated films like “Zootopia” and “Finding Dory” was one of the stories of 2016, and NBCU doubled down on the genre by adding the “Kung Fu Panda” and “Shrek” studio to its fold.

DreamWorks

3. Lionsgate merges with Starz

Price tag: $4.4 billion

The “Hunger Games” studio and premium cable channel announced their merger plans in June, a year after telecom billionaire and major Starz shareholder John Malone bought a stake in Lionsgate. Starz will become an independently run subsidiary of Lionsgate once the deal is officially approved.

Lionsgate/Starz

2. Verizon buys Yahoo

Price tag: $4.8 billion – or maybe less

The embattled Internet 1.0 company finally found its lifeboat, selling its core business to Verizon for $4.8 billion in July, eight years after rejecting a $45 billion bid from Microsoft. But after the extent of Yahoo’s 2014 hack was revealed, Verizon was pushing for a $1 billion discount, and has been taking a second look at the deal.

Verizon/Yahoo

1. AT&T agrees to acquire Time Warner

Price tag: $85.4 billion

AT&T agreed to buy Time Warner, combining two century-old companies to create a content and distribution powerhouse in the biggest media deal since the ill-fated 2000 AOL-Time Warner merger. One caveat: Donald Trump, who has been an outspoken critic of Time Warner’s CNN, had threatened to block the deal. However, a Wall Street-friendly Republican Congress could provide a smoother path.

AT&T/Time Warner

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Rewind 2016: From China’s Dalian Wanda Group to AT&T, deep-pocketed buyers were chasing content all year

Media and entertainment dealmakers returned in full force this year after a quiet 2015, as there were nine mergers and acquisitions valued at more than $1 billion -- from Chinese buyers such as the Dalian Wanda Group to AT&T, which agreed to acquire Time Warner for $85 billion. Here's a rundown of the biggest.